U.K. Retail Sales Rise, Defying Forecast

LONDON -- U.K. retailers posted their sharpest sales gain on record last month, baffling economists trying to square the robust data with gloomy inflation figures and falling housing prices.

The sales surge was the highest monthly rise since records began in January 1986. Volume rose 3.5% from April and 8.1% from May 2007, driven by sales of seasonal food and clothing, the Office for National Statistics reported Thursday. The gains...